Axcel recognises that profit and positive impact are intrinsically linked. Our structured approach to sustainable value creation ensures all our companies address material environmental, social, and governance topics in line with the UN Sustainable Development Goals. By embedding responsible business conduct across our portfolio companies and ensuring that the corporate strategies addresses sustainability driven risks and opportunities, our companies will deliver better returns, will be valued higher, and will increase their positive impacts on society and the environment. Implementing sustainability-linked financing is a natural next step in our efforts to make sustainability an integrated part of each portfolio company’s strategic agenda.
Sustainability-linked finance is a tool to incentivise companies to achieve environmental, social, and/or governance (ESG) goals. In practice, Axcel will seek to include a sustainability-linked feature in all new portfolio company loan agreements. These agreements ensure that sustainability performance targets are defined for material ESG topics with the interest payment depending on the company reaching the targets.
ProData, part of Axcel VI, is the first company in the Axcel family to sign a sustainability-linked term loan and revolving credit facility. The pricing of the sustainability-linked facilities will be determined by ProData reaching sustainability targets on employee turnover and gender diversity in leadership. The annual targets, stretching over the lifetime of the facilities, are aligned with ProData’s business objectives and the UN Sustainable Development Goals (SDG 5 Gender diversity and SDG 8 Decent work and economic growth). ProData will report on progress on the KPIs publicly in its sustainability report. The sustainability-linked loan is backed by a strong set of financial institutions including Danske Bank and Nykredit Bank A/S.
Christian Schmidt-Jacobsen, Managing Partner at Axcel, says: “Axcel has a long-standing commitment to investing in a responsible manner. Our investment strategy and processes are guided by our desire to deliver value to investors and society at large. We are therefore very pleased with the productive dialogue with the banks and ProData on our shared commitment to further strengthen the link between business objectives and sustainability goals.”
Sarah Hempel, Head of Sustainability at Axcel, says: “The dialogue between portfolio company management and financial institutions to define ambitious and material sustainability targets for sustainability-linked financing is a powerful tool to promote quantitative target setting on sustainability objectives. It complements our structured approach to active ownership where we require all companies to assess ESG impacts, risks and opportunities and prioritize areas for action.”